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Decline Curve Analysis of Shale Oil Production the Case of Eagle Ford

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Decline Curve Analysis of Shale Oil Production the Case of Eagle Ford UPTEC ES 14039 Examensarbete 15 hp Oktober 2014 Decline Curve Analysis of Shale Oil Production The Case of Eagle Ford Linnea Lund Abstract Decline Curve Analysis of Shale Oil Production: The Case of Eagle Ford Linnea Lund Teknisk- naturvetenskaplig fakultet UTH-enheten Production of oil and gas from shale is often described as a revolution to energy production in North America. Since the beginning of this century the shale oil Besöksadress: production has increased from practically zero to currently supply almost half of the Ångströmlaboratoriet Lägerhyddsvägen 1 U.S. oil production. This development is made possible by the technology of Hus 4, Plan 0 horizontal drilling and hydraulic fracturing. Since the production has not been ongoing for that long, production data is still fairly limited in length and there are still large Postadress: uncertainties in many parameters, for instance production decline, lifespan, drainage Box 536 751 21 Uppsala area, geographical extent and future technological development. More research is needed to be able to estimate future production and resources with more certainty. Telefon: 018 – 471 30 03 At the moment shale oil is extracted only in North America but around the world Telefax: investigations are starting to assess if the conditions are suitable from shale oil 018 – 471 30 00 extraction elsewhere. The global technically recoverable resource has been estimated to 345 Gb, 10% of all global technically recoverable resources. Health and Hemsida: environmental aspects of shale oil and gas production have not yet been investigated http://www.teknat.uu.se/student thoroughly and there is a risk that these parameters may slow down or limit the spreading of shale development. This report aims to examine production patterns of shale oil wells by applying decline curve analysis. This analysis comprises of analyzing historical production data to investigate how the future production may develop. The area of the study is the Eagle Ford shale play in Texas, U.S. The goal is to fit decline curves to production data and then use them for making estimates of future production in the Eagle Ford. The production in the shale oil wells included in the study reach their peak already within a few months after production starts. After this point, production is declining. After one year, production has decreased by 75% and after two years the production is 87% of the peak production. The hyperbolic decline curve has a good fit to production data and in many cases the curve is close to harmonic. It is too early to determine whether the alternative decline curve that is tested, the scaling decline curve, has a better fit in the long term. The report also investigates how the density of the petroleum affects the decline curve. The result is that lighter products decline faster than heavier. A sensitivity analysis is performed to illustrate how different parameters affect the future production development. In addition to the wells’ decline rate, the assumptions on the maximum number of wells, the maximal production and the rate at which new wells are added affect the ultimately recoverable resource. These parameters all have large uncertainties and makes resource estimations more difficult. Handledare: Kjell Aleklett, Henrik Wachtmeister Ämnesgranskare: Mikael Höök Examinator: Petra Jönsson ISSN: 1650-8300, UPTEC ES14 039 Uppsala University, Master Thesis in Energy Systems Engineering, Linnea Lund SAMMANFATTNING Sedan början av 2000-talet har man börjat utvinna alltmer så kallad skifferolja i Nordamerika. Det som skiljer skifferoljan från konventionell olja är geologin. Skifferoljan är instängd i skifferformationer eller andra trånga bergsformationer, vilket innebär att oljan har mindre möjlighet att förflytta sig i berget och utvinningen försvåras. Utvinningen har möjliggjorts tack vare teknikutveckling när det gäller borrning och så kallad hydraulisk spräckning av berget, där man skapar nya frakturer för att skapa vägar för oljan att flöda från berget till brunnen. Dessa två tekniker har lett till att produktionen av skifferolja i USA har stigit från nästan noll år 2000 till 3,5 miljoner fat per dag år 2013 och nu står för nästan hälften av USA:s oljeproduktion. Utvinningen av olja och gas från skifferformationer kallas ofta en revolution för Nordamerikansk energiproduktion på grund av den stora produktionsökningen som skett under en väldigt kort tid. Volymen olja och gas som har utvunnits har varit större och ökat snabbare än de flesta förutspått och har fått följder som ett minskat gaspris och importberoende i Nordamerika. Då geologin skiljer sig från konventionella oljefält och utvinningen inte pågått så länge finns det stora osäkerheter när det gäller framtida produktivitet och utbredningsmöjligheter för skifferoljeproduktion. Bland de rapporter som publicerats är få akademiska, expertgranskade studier. Denna rapport syftar till att undersöka produktionsmönster hos skifferoljebrunnar och utifrån den historiska produktionen bedöma framtida produktionspotential. Området för studien är skifferformationen Eagle Ford i Texas, USA. Produktionen i en skifferoljebrunn avtar snabbare än i en konventionell oljebrunn vilket leder till att nya brunnar måste borras i hög takt för att uppehålla produktionen. Produktionen i de skifferoljebrunnar som studerats når sin topp redan inom några månader efter att produktionen startar. Därefter avklingar produktionstakten snabbt. Efter ett år har produktionstakten sjunkit med 75 % och efter två år har den sjunkit med 87 % jämfört med den högst uppmätta produktionen. Rapporten undersöker även hur oljans densitet påverkar produktionen med resultatet att lättare olja har en snabbare avklingningstakt. En känslighetsanalys har gjorts för att illustrera hur olika parametrar påverkar den framtida produktionsutvecklingen. Utöver osäkerheten i brunnarnas avklingningstakt (decline rate) påverkas den framtida produktionen av antaganden om maximalt antal brunnar, maximal produktion hos en brunn och i vilken takt brunnarna kan borras. Alla dessa parametrar har fortfarande stora osäkerheter och försvårar resursuppskattningen. i Uppsala University, Master Thesis in Energy Systems Engineering, Linnea Lund ACKNOWLEDGMENTS This report is the result of my master thesis at the Energy Systems Engineering Programme at Uppsala University and the Swedish University of Agricultural Sciences. The thesis was carried out at the Global Energy Systems research group at Uppsala University. I would like to thank my supervisors Henrik Wachtmeister and Kjell Aleklett for their guidance and support during my thesis project. I also want to thank Mikael Höök for inspiration and support throughout the project. Special thanks to Kjell who arranged for me to come with him to Texas to visit the area of the study and much more of Texas. I am very grateful I got this opportunity which added value to my research. I am also thankful to Drillinginfo for allowing the research group access to the extensive database, without which this project would be much harder to carry through. Finally, my warmest thanks to all members of the Global Energy Systems research group, including my fellow master students, who made the time of my master thesis extra enjoyable. ii Uppsala University, Master Thesis in Energy Systems Engineering, Linnea Lund Contents 1 Introduction …………………………………………………………………………………...1 1.1 Purpose and goal………………………………………………………………………..4 1.2 Limitations of study…………………………………………………………………….4 2 Petroleum background ............................................................................................................. 5 2.1 The origin and accumulation of oil and natural gas……………………………………5 2.2 Classifying oil…………………………………………………………………………..6 2.2.1 Conventional and unconventional resources of oil .................................................. 6 2.2.2 API gravity .............................................................................................................. 6 2.3 Oil production…………………………………………………….…………………….7 2.3.1 Fluid flow equation .................................................................................................. 7 2.3.2 Recoverable resources and depletion ...................................................................... 7 2.4 Decline rates and decline curve analysis…………………………………………….....8 3 Shale oil ................................................................................................................................ .12 3.1 Global shale resources………………………………………………………………...12 3.1.1 Shale oil and gas in Europe ................................................................................... 14 3.2 Shale oil extraction……………………………………………………………………15 3.2.1 Drilling .................................................................................................................. 15 3.2.2 Hydraulic fracturing .............................................................................................. 16 3.3 Environmental and health aspects of shale oil extraction…………………………….17 3.3.1 Water and air related impacts ................................................................................ 17 3.3.2 Enhanced seismicity .............................................................................................. 19 3.3.3 Infrastructure issues ............................................................................................... 20 3.3.4 Health ...................................................................................................................
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